9 April 2003 Excise Interpretation 44924 - Request for Brands to be Prescribed

Dear XXXXX:

This refers to your letter XXXXX, concerning the addition of a number of brands and brand extensions to the list of tobacco product brands to be prescribed for purposes of the export tax and the marking exemptions. I also received a copy of a letter from XXXXX to Madeleine Walker of our office, XXXXX requesting that the XXXXX brand and its extensions be prescribed. I have not, however, received the original request.

Following the submission of your most recent request, Steve Mosher of our office spoke with XXXXX XXXXX, and faxed XXXXX the lists of brands and brand extensions already approved or recommended for approval as prescribed brands. This list includes names drawn from your lists that have not yet been approved or recommended for approval. Subsequently, XXXXX confirmed the brand extensions submitted for approval as prescribed brands, along with certain clarifications about brands or brand extensions to be retained or deleted. There are also certain brand extensions previously prescribed or recommended for prescription, with names or styles which should be corrected in the relevant regulations.

The attached list (Appendix A) of brand names and extensions sets out those names that will be added to the lists of tobacco products to be submitted for prescription by the Governor General in Council under the Stamping and Marking of Tobacco Products Regulations and the Regulations Relieving Special Duty on Certain Tobacco Products. These two regulations will be recommended for approval under subsection 38(3) and paragraph 58(1)(a) of the Excise Act, 2001 ("new Act"), which is scheduled to be implemented on July 1, 2003.

We have also noted that the XXXXX brand extensions XXXXX should not appear in the schedules to the regulations. As well, the brand extensions XXXXX XXXXX should be replaced by XXXXX, as confirmed by Steve Mosher in his telephone conversation with XXXXX. XXXXX further clarified the appropriate use of the words "Light" and "Lights" and the brands with which each style should be associated. A separate list of corrected brand extensions is included (appendix B). We will do our best to ensure that these corrections appear in the final versions of the regulations when submitted for approval.

On the understanding that the brand extensions named in the attachment will be exported, and will not be sold in the Canadian market, the listed brands and brand extensions will be regarded, on an administrative basis, as qualifying under section 23.3 of the current Excise Tax Act for exemption from the excise tax otherwise imposed under section 23.13 of that Act. They will also be treated as qualifying under subsection 202(4) of the Excise Act for exemption from the marking requirements otherwise imposed under subsection 202(2) of that Act.

Should any of the brands listed in the attachment be offered for sale in the Canadian duty-paid market at any time in the future, except as provided for in subsection 23.3(1) of the Excise Tax Act and subsection 202(4) of the current Excise Act, or under subsections 38(3) and 58(1) of the new Act once it is implemented, the exemptions from the tobacco marking requirements and from the payment of excise tax or special duty would not apply.

As noted in my letter XXXXX, future approvals of prescribed tobacco products or prescribed cigarette formulas, except those requested prior to March 31, 2003, will not be granted on a "pre-approved" basis. Prescriptions will now have to be approved by the Governor General in Council before becoming eligible for relief of the special duty and marking provisions of the new Act.

Should you require further information, please contact me at (613) 954-0111 or Steve Mosher at (613) 941-1497.

Phil McLester
Director
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate

Attachments

XXXXX XXXXX Appendix A - New Brands and Brand Extensions to be Prescribed

XXXXX

XXXXX

XXXXX